Daily Rules, Proposed Rules, and Notices of the Federal Government
ICE Clear Europe is in regular communication with representatives of its Clearing Members, as that term is defined in the CDS Procedures of ICE Clear Europe (the "CDS Procedures") in relation to the operation of clearing processes and arrangements. The purpose of the proposed rule changes is to implement in its CDS Procedures new clearing certainty requirements under Commodity Futures Trading Commission ("CFTC") Rules 39.12(b)(7) and 1.74(b), which become effective on October 1, 2012. All capitalized terms not defined herein are defined in the CDS Procedures.
In its filing with the Commission, ICE Clear Europe included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. ICE Clear Europe has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
As noted above, the principal purpose of the proposed procedure amendments is to update the particular characteristics of the CDS Procedures applicable to the clearing of CDS Contracts. Specifically, the proposed rule changes affect Part 4 of the CDS Procedures by addressing the timeframe under which trades must be accepted or rejected for clearing under new CFTC rules and adding certain clarifying language around the weekly CDS clearing cycle. Each of these changes is described in detail as follows.
Paragraph 4.4(b) and 4.5 of the CDS Procedures will be revised to clarify the acceptance timing and procedures for the weekly CDS clearing cycle in light of the new clearing certainty requirements under CFTC rules.
Under paragraph 4.19 of the revised CDS Procedures, ICE Clear Europe will incorporate new CFTC Rule 39.12(b)(7)(ii), which requires, among other things, that ICE Clear Europe accept or reject trades submitted for clearance that are executed competitively on or subject to the rules of a designated contract market or swap execution facility (or similar facility) as soon after execution as would be technologically practicable if fully automated systems were used.
Under paragraph 4.20 of the revised CDS Procedures, ICE Clear Europe will incorporate new CFTC Rule 39.12(b)(7)(iii), which requires, among other things, that ICE Clear Europe accept or reject trades submitted for clearance that are not executed competitively on or subject to the rules of a designated contract market or swap execution facility (or similar facility) as soon after submission for clearing would be technologically practicable if fully automated systems were used.
Finally, under paragraph 4.21 of the revised CDS Procedures, ICE Clear Europe will implement the standards of CFTC Rule 1.74(b) that require Clearing Members to accept or reject each Trade submitted by or for the Clearing Member as quickly as would be technologically practicable if fully automated systems were used. Clearing Members would
ICE Clear Europe believes that the proposed rule changes are consistent with the purposes and requirements of Section 17A of the Act and the rules and regulations thereunder applicable to it. ICE Clear Europe believes that implementing the CFTC's clearing certainty requirements will comply with the Act and the rules and regulations thereunder.
ICE Clear Europe does not believe that the proposed rule change will have any impact or impose any burden on competition.
ICE Clear Europe has not solicited and does not intend to solicit comments regarding this proposed rule change. ICE Clear Europe has not received any unsolicited written comments from interested parties.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
* Electronic comments may be submitted by using the Commission's Internet comment form (
* Paper comments should be sent in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
Section 19(b) of the Act
In its filing, ICE Clear Europe requested that the Commission approve this proposed rule change on an accelerated basis for good cause shown. ICE Clear Europe cites as the reason for this request ICE Clear Europe's operation as a DCO, which is subject to regulation by the CFTC under the CEA. The Commission finds good cause for approving the proposed rule change prior to the 30th day after the date of publication of notice in the